Marketing Analysis – Sunnyside Farms

Executive Summary – Decision

After careful analysis of the options, there are two options to pursue in tandem with a complete annual investment of approximately $1.3 million.  First, if $60,000 per year on advertising is yielding a return of $393,600 in sales annually, then quadrupling this budget may stand to do the same in terms of sales and market share.  The new budget will be $240,000 annually.  However, we cannot rely on advertising alone.  To place ourselves in a competitive position against future entrants and erect a barrier to entry, then we must cut out the margin markup that exists in the independent retailer stream and create our own distribution system.  We must innovate. If we completely cut out the independent distribution and essentially forward integrate into our own distribution system, we will completely negate the independent distribution markup and gain an additional $0.23 cents per head in MSP revenue.

 

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